Deferral and Catch-Up Limits

401(k), 403(b), Certain 457(b) Plans 

  2023 2022
Age 49 and under $22,500 $20,500
Age 50+ catch-up* Additional $7,500 Additional $6,500
403(b) 15 years of service catch-up** Up to an additional $3,000 Up to an additional $3,000
457(b) special election catch-up*** Up to an additional $22,500 Up to an additional $20,500

 

* Age 50+ before year-end. If you participate in a 457(b) plan, the age 50+ catch-up is only available if a governmental employer sponsors the plan.

** The 15 years of service catch-up may apply to employees participating in a 403(b) tax-deferred annuity who have had at least 15 years of service with an educational organization, hospital, home health agency, health and welfare service agency, church or convention or association of churches. The additional catch-up cannot cumulatively exceed $15,000 throughout the 403(b) participant’s lifetime. The additional catch-up requires a calculation to determine the available amount. If you’re a 403(b) participant who is eligible for both the 15 years of service catch-up and the age 50+ catch-up in the same year, the Internal Revenue Code requires you to first contribute the maximum permitted under that year’s 15 years of service catch-up before contributing under the age 50+ catch-up.

*** This special election catch-up applies to employees participating in an eligible governmental 457(b) deferred compensation plan who have elected the special catch-up available in the three years prior to the year of normal retirement age. If you’re eligible for both the age 50+ catch-up and the special election catch-up under your 457(b) plan, IRS rules do not permit you to use both in the same calendar year. IRS rules allow you to use the catch-up that produces the greater amount.
 

IRS Section 415(c) Limits

The total amount you and your employer can contribute to a 401(a), 401(k), or 403(b) plan.

  2023 2022

Defined contribution plan annual dollar limit*

$66,000

$61,000

Defined benefit plan maximum annual benefit

$265,000

$245,000

 

* Defined contribution annual additions limit does not include any age 50+ catch-up made in that year.

Compensation Limits

401(a), 401(k), and 403(b) Plans

Maximum individual compensation recognized for determining contributions.

  2023 2022

General limit for compensation

$330,000

$305,000

Special limit for compensation for governmental plan participants enrolled before the 1996 plan year

$490,000

$450,000

 

Highly Compensated Employee for 401(a), 401(k), and 403(b) Plans

Check with your plan. The definition of a highly compensated employee may vary based on plan design and employee population.

  2023 2022

Annual compensation threshold of at least 

$150,000

$135,000

 

Retirement Savings Contributions Credit (Saver’s Credit)

You may qualify for a tax credit on your federal tax filing of up to $1,000 for the first $2,000 you contribute to a qualified plan (reduced by any distribution from the plan during that year).

2023 Saver’s Credit

The credit amount depends upon:

  • Your adjusted gross income (AGI) reported on form 1040/1040A
  • Income tax filing status – single, head of household, or married filing jointly
  • The amount you contributed to your IRA or employer-sponsored retirement plan in that tax year

Calculate Your Credit 

The credit phases out based on your federal income tax filing status and AGI.

Credit Rate Married Filing Jointly Head of Household All Other Filers*

50% of your contribution

AGI not more than $43,500

AGI not more than $32,625

AGI not more than $21,750

20% of your contribution

$43,501  $47,500

$32,626  $35,625

$21,751 $23,750

10% of your contribution

$47,501 – $73,000

$35,626 – $54,750

$23,751 – $36,500

0% of your contribution

More than $73,000

More than $54,750

More than $36,500

Health Savings and Spending Account Limits

To be eligible to contribute to a Health Savings Account (HSA), you must be enrolled in an eligible High-Deductible Health Plan (HDHP).

  2023 2022

Self-only HSA

$3,850

$3,650

Family HSA

$7,750

$7,300

Age 55+ catch-up*

Additional $1,000

Additional $1,000

 

* Age 55+ before year-end.

Individual Retirement Account

  2023 2022
Traditional IRA $6,500 $6,000
Roth IRA $6,500 $6,000
Roth IRA income phase-out for married couples filing jointly $218,000 - $228,000  
Roth IRA income phase-out for single filers

$138,000 - $153,000

 

 

Definitions for Cost-of-Living Adjustments

Get more details about specific terms

Annual deferral limit for 401(k), 403(b), and 457(b) plans

The limit on elective deferrals (including Roth contributions) a participant may make during the calendar year.

SIMPLE retirement plans

The limit on elective deferrals a participant may make during the calendar year for the SIMPLE (Savings Incentive Match Plans for Employees of Small Employers) Retirement Plan.

Catch-up contributions

Age 50+ for 401(k), 403(b)* and 457(b)* — Participants 50 and older may make catch-up contributions (including Roth contributions) — after the elective deferral limit has been reached — up to the annual catch-up limit, if the plan permits.

Age 50+ SIMPLE Retirement Plan — If the plan permits, participants 50 and older may make additional deferred contributions — after the elective deferral limit has been reached — up to the annual catch-up limit.

*A special additional catch-up limit applies for certain employees enrolled in 403(b) and 457(b) plans.

IRS Section 415(c) limits

Defined Contribution Plans — The total of all employer and employee contributions to the plan for the 12-month limitation year (as defined in the plan document) cannot exceed the lesser of $61,000 (as adjusted for inflation) or 100% of compensation.

Defined Benefit Plans — The maximum annual benefit participants may receive is the lesser of $245,000 (as adjusted for inflation) or 100% of the participants’ average compensation for their highest three years of earnings.

Compensation limits

General compensation limit — The maximum compensation that may be considered when determining contributions for the plan year (as adjusted for inflation).

Special compensation limit for governmental plan participants enrolled before the 1996 plan year — The maximum compensation that may be considered when determining contributions for the plan year (as adjusted for inflation).

SEP eligibility — The minimum compensation taken into account when determining which employees are eligible for a simplified employee pension (SEP) plan (as adjusted for inflation).

Highly Compensated Employee (HCE)

Any participant who owns 5% or more of the business at any time during the current or preceding year and/or any participant whose compensation in the preceding year is greater than the annual compensation limit (as adjusted for inflation). The current year’s limit is used when considering a look-back to the prior year.

Adjusted gross income (AGI) for Saver's Tax Credit

The highest AGI an individual may have to be eligible for a tax credit on their federal tax filing, based on filing status.

Health Savings and Spending Accounts

Health Savings Account (HSA) — An employer-sponsored plan that can be used to pay for qualified medical expenses — now or in the future — when paired with a high-deductible health plan. HSAs are funded with pre-tax dollars deposited into an individual account by an employee or the employer, usually through payroll deduction.

Transamerica and its agents and representatives do not provide tax or legal advice. This material is for informational purposes only and should not be construed as legal or tax advice. For legal or tax advice concerning your situation, please consult your attorney or tax professional.